Putin signed the law on personal income tax deduction for life insurance

The President of Russia Vladimir Putin has signed a law granting to the taxpayer the possibility of receiving social tax deductions for personal income tax before the end of the tax period in case of voluntary insurance of life, according to the presidential website on Wednesday.

Federal law passed by the Parliament on 16 November and approved by the Federation Council on November 29 of this year.

As mentioned in the help document, the law will eliminate the need to fill the taxpayer’s tax return for the tax on incomes of physical persons and will greatly facilitate the procedure for obtaining such a deduction to individuals who pay insurance contributions under contracts of voluntary life insurance on their own.

Previously, the tax deduction provided to the taxpayer at the end of the tax period, if the premiums under the contract of voluntary insurance of life were withheld from payments in favour of the taxpayer and remitted by the employer to the relevant Fund or insurance organization.

However, this does not take into account the current trend towards the conclusion of the respective contracts without the participation of the employer. According to the Russian Union of insurers, 99% of the life insurance contracts at the present time is without the participation of the employer. According to the social tax deduction most taxpayers can only claim at the end of the tax period.

The President also signed a law that excludes from the Tax code requirement of obtaining the result of state services in electronic form as a condition of applying a coefficient of 0.7 for the payment of the state duty for committing legally significant actions in respect of individuals. This will increase the number of citizens through the portals of state and municipal services and reduce the cost of state and municipal organs for the reception and processing of statements, said who initiated the adoption of this law the government of the Russian Federation.